May 19 Several bitcoin exchanges including the
now-defunct Mt. Gox received subpoenas from Manhattan federal
prosecutors this winter as they look into possible ties between
the exchanges and the online drug market Silk Road, the Wall
Street Journal reported on Monday, citing people familiar with
The subpoenas to Mt. Gox demanded customer-transaction logs
and materials related to solicitation of investors. The report
did not mention any other bitcoin businesses that received
Mt. Gox's lawyers advised Chief Executive Officer Mark
Karpeles against going to the United States after he was
summoned by a judge there to testify for a class-action lawsuit,
because they were concerned he would be arrested in connection
with this case.
The prosecutors and Federal Bureau of Investigation agents
are examining whether the exchange and others like it may have
processed transactions connected to Silk Road, the people said.
The investigation was at an early stage and there were no
conclusions yet on whether the exchanges were connected with
Silk Road, one of the people familiar with the matter told the
Last month, prominent bitcoin entrepreneur Charlie Shrem was
indicted by a federal grand jury in New York on charges of
funneling cash to Silk Road.
Shrem, one of the digital currency's most visible promoters,
is accused of conspiring with a Florida man, Robert Faiella, to
sell more than $1 million in bitcoin to the users of Silk Road
despite knowing that it would be spent on illegal activities
including drug trafficking.
It was preceded by the arrest of alleged Silk Road founder
Ross Ulbricht in San Francisco last year when he was charged in
federal court in Manhattan with counts relating to drug
trafficking, money laundering and computer hacking, all stemming
from his alleged involvement in the illicit online marketplace,
which sold drugs and criminal services in exchange for bitcoin.
After Ulbricht's arrest, the government shut down the website.
(Reporting by Mridhula Raghavan in Bangalore and Sophie Knight
in Tokyo; Editing by Ken Wills)